Hello, this is James D’Angelo and welcome
to the Bitcoin 101 Blackboard series. Today,
we’re going to be introducing something
that we’ve been working on for a number
of months. It’s called Sno-caps or the People’s
Really, what it is it’s pitting Bitcoin’s
Public Ledger versus this enormous problem,
this really tough and intractable problem
called the Tragedy of the Commons. This is
a personal journey. It’s something I’ve
been very close to for a good chunk of my
Because of that, I’m going to rewind and
talk about when I first learn about tragedy
of the commons which happen to be in university
but ironically, it wasn’t in class. I first
learned about TOC or tragedy of the commons
in my frat house because our kitchen looked
exactly like this one, right here.
What exactly is tragedy of the commons? Well,
if you put 15 guys in one house all sharing
rent, problems immediately start to arise
in the common areas; the kitchen, the living
room and in particular, your frat house bathroom.
This is just a very mild example of people
writing notes because the toilet paper was
You might look up TOC in the dictionary or
Wikipedia. We thought it would be important
to look at the definition of just one particular
case and this is the tragedy of the frat house
This is an “economics theory, according
to which frat boys too busy with their homework
and partying, behaving in such a way that
no one on earth will want to use their bathroom.
It was such a TOFHB that none of the sophomores
could even shower at home.” Too disgusting,
too dirty and anything you left in the shower
would immediately get stolen.
If you read deeper, you’ll find that TOC
happens elsewhere, as well. It’s a big problem
with email and spamming, Wikipedia falsehoods,
vandalism, office refrigerators both in terms
of cleanliness and stealing, clogged hallways,
et cetera, et cetera. Remember, it’s just
a big problem of commonalities, common spaces,
things that everyone can use.
But our example talks about the frat house.
Let’s talk about exactly what was going
on in that frat house. Because of TOC, housemates
immediately started getting angry at each
other. Pointing fingers and making signs that
looked a lot like this.
“Sadly, your mother doesn’t work here
so clean up your own mess.” We all know
the results of putting up signs like this,
it does nothing. They don’t work. Immediately
you had a situation where between 15 guys,
trust had started to erode.
Housemates hid their toilet paper and food.
They locked their doors because they were
hiding stuff in there. They stole things when
they went into the bathroom because things
were stolen from them.
They started to actually not be able to use
certain areas of the house. They had to eat
in restaurants and shower in gyms. Here is
another little sign, “Do not use, I spit
in this and someone keeps using it. Thanks.”
We know what happens, someone turned around
and used it, or they peed in it. Pretty disgusting
stuff as things start to erode. Every time
you talk about this with people, you still
get this big BS, which is that “You can
make a difference.”
Well, if you just started to clean up, others
would see what you’re doing, respect that
and start to clean up themselves. That’s
just not true, no matter how many signs you
make, no matter how much cleaning you do,
you cannot make a difference in a frat house.
What really happens is because the dirtier
housemates harden with all the finger pointing
and the cleaner housemates start to evolve.
This became the new me.
You become this pig where you’re just dropping
your pizza everywhere, you got your laundry
over here and indeed because of common spaces
and the mess in common spaces, you become
worse than if you were living alone.
After graduation, I often worked as a conservationist
so here I am in Gabon. This is elephant poop
over here. This is a three-toed sloth here.
We got dropped off at our camp when we were
trying to return to the wild.
One thing that was for sure is that the work
involved lots and lots of rivers. Here is
the Amazon River; here are actually the beginnings
of the Amazon river and the Andes of Peru.
As result of working a lot with rivers, you
see a lot of TOC.
As we know, it wasn’t so long ago, definitely
this century, when rivers were still magical,
adventurous places. Mark Twain based Huckleberry
Finn in the rivers. Kids would go swimming
all the time in the rivers.
People spent their lives in and around rivers.
Indeed, at that time, this river seemed infinitely
clean. There seemed no way to mess up this
river paradise, but as we know, things have
This is a little video, right here, in Kathmandu,
Nepal. It’s pretty painful to watch. But
we see that we’ve treated our rivers in
the last 100 years like we treat our frat
This isn’t something that just happens in
Nepal, okay. Here’s the Mississippi river.
But right here in Boston, we’ve got the
Charles River which they’re trying to clean
up desperately but still very, very polluted.
What we see here is all the types of pollutants
that are being dumped into rivers. Here’s
a factory here; here’s the toilets, septic
tanks; here’s fertilizers being spilled
into the river; animal wastes, chickens and
pigs; here’s the run off from automobiles
especially when it rains; and here’s the
refineries down in the gulf coasts.
There’s really no great surprise. When you
get down to the end of the river and to the
Gulf of Mexico, the fish aren’t doing so
well and neither is the fishing. But what’s
important to understand is there’s a real
tragedy here because you have a dilemma.
If you’re actually working on the river
and say you’re this factory, right here.
You decide to do something really good with
your waste. You decide instead of dumping
it into the Mississippi, that you’re going
to put it through some sort of plant and clean
Then, you’re going to reuse that water.
The trouble with that is that’s expensive.
Now, okay, if you’re the only factory doing
it, you’re now going to be at a competitive
disadvantage to your neighbours who now have
the advantage of not having to pay for treating
This is the heart of the problem. If you decide
to do the right thing, you’ll find yourself
having to charge more for your services than
any of your competitors along the river. That
is where the real tragedy comes in.
If you’re in a frat house or if you’re
working on a river, pointing blame is easy,
trust begins to erode and anger increases.
You start playing this big blame game. For
me, I saw this very clearly.
Working as a local environmentalist, I started
to see some problems with what I was doing.
If I was spending my day trying to prevent
poaching of gorillas or trying to prevent
invasive species from ruining the jungle;
but with climate change, global climate change,
there was the possibility that all of Gabon,
which is now a forest would end up in short
order looking a bit like the Etosha Pan in
Here’s me on my computer actually thinking
about that. I got very scared. We live in
a world of strange ironies brought on by this
tragedy of the commons. You have tragedy of
the local commons like the tragedy of the
frat house bathroom. You see how it’s almost
like a big fractal.
The small problem and the big problem are
exactly the same. First, I’ll clean my bathroom
and then I’ll take care of the earth. Yes,
right, we know that’s not going to happen.
When you start to consider things like global
climate change, you’ve really got the same
problem; tragedy of the frat house bathroom
times a billion, 2 billion, who knows what,
times a lot – a really big problem multiplied
by really big numbers and growing.
We’ve all seen these images. Global carbon
emissions, 1751-2014, we sort of see it taking
off during the industrial revolution and then
increasing exponentially into modern times.
Indeed exponential; anytime we see something
exponential these days, here’s the growth
of Facebook or the growth of Google or growth
of any of these big tech firms.
Anytime we see this sort of exponential thing,
we realized that there is sort of an exponential
growth to tech, especially with this capitalism
Here, we have growth of electricity usage,
here’s the growth of the telephone, the
refrigerator, the stove, the radio, the car,
clothes washer, clothes dryer, air conditioning,
colored TV, computers.
These are years down here 1960, 1945 and we
see that these are all growths that are exponential
and the interesting thing about all of them,
each one of them is that they put out a lot
If you really doubt that it’s human created,
all you have to do is look at the things that
produce CO2 and see their exponential growth.
Here’s the cell phone, VCRs, and here’s
the internet which actually uses up a lot
of electricity – all the drives turning at
Google and all these search engines, et cetera.
Growth is often exponential; tech growth in
particular is often exponential. You go around
and do your thing because you care. You start
lowering your carbon footprint, you drive
less, take public transportation, use less
gasoline. Do all these stuff and what do you
see? Well, you actually see that the destruction
is continuing and it’s continuing exponentially.
Your individual work is not even a blip on
this growth curve.
You start to realize that the biggest BS ever
when it comes to frat houses is actually the
biggest BS ever when it comes to global climate
change. You cannot individually make a difference.
I just doesn’t work.
What really happens is you end up paying extra.
To be more environmental, often times, it
means you have to process your waste. You
have to do extra things or avoid certain things.
You end up paying the cost.
And the question is “Will you go broke while
everybody who’s exploiting the environment
is running off with the bags of cash?” Just
like the frat boys getting angry at each other,
you got people getting angry and scared, pointing
fingers at government, yelling left and right.
You got the democrats drawing cartoons, making
fun of the republicans. But does all that
finger pointing make people better? Well,
actually it doesn’t. It sort of leads to
entrenchment of ideas; it leads to conservatism
of what you’re being made fun of for and
we’ve seen that through time.
So here are polled republicans believes that
climate change is really a problem, that it’s
really occurring and over time; so here is
2008, 2007, so there’s probably like 1990s.
You can see that it’s gone down. They’ve
entrenched in their ideas, while democrats
have gone up somewhat
This is a real tragedy. This is the tragedy
of the commons. You see some groups hardening
and other groups are changing but what’s
interesting here is the republicans have given
us the strongest practical tool to fight climate
change and that is cap-and-trade. This goes
back to the 90s, to George Bush Sr. proposed
and signed a cap-and-trade bill in 1990.
The amazing thing about it is it really, really
worked. The big problem then was sulphur dioxide
which was causing acid rain. Here you can
see the signing of this bill and the reduction
of sulphur dioxide into the atmosphere. It
worked gangbusters. As a result, cap-and-trade
has become the centrepiece of all environmental
If you look at what they were proposing Kyoto
or Copenhagen, it’s all about developing
some form of global cap-and-trade where you
actually cap or limit the amount of carbon
that each country can produce and you can
start to trade the ability to emit carbon
or pollute between the different countries;
realistically creating a tradable value around
emissions. This is such a great idea.
Unfortunately, that’s where the good news
ends. Ever since 1990, lots of problems have
started to come out based on cap-and-trade.
cap-and-trade has proven costly in two main
ways. One is it’s expensive to regulate
so you’ve got to send out all these regulators
to go about and measure the amount of carbon
that’s being produced.
That’s fairly expensive especially for governments
who don’t do that thing very well but it
also creates the same idea that we were talking
about. If certain countries do not sign on
for the cap-and-trade, then it becomes expensive
for your country to be doing a cap-and-trade
when the other countries are not. If you’re
limiting your emissions and they are not,
you find yourself in a disadvantaged situation.
You get a competitive disadvantage.
We see here, when we’re trying to recover
from this big, economic meltdown of 2007-2008.
Well, the last thing anybody wants to hear
is sort of this new expense of building a
This is really what we just said. Countries
which adopt end up with an added expense and
as a result they can be the ones that go broke
while the other countries start doing really
well because it’s just plain cheaper not
to pay for your pollution. In all these environmental
accords at Kyoto, Copenhagen, there’s lots
of anger; people pointing fingers. It becomes
political. If becomes divisive.
You’ve got the USA pointing their fingers
at China. You have the citizens of the US
getting angry at the American government;
Chinese angry at the Chinese government and
every possible combination in the middle;
big tragedy of the commons, a big blame game.
And as we saw in the chart, republicans have
begun stepping back from anything to do with
cap-and-trade and really anything to do with
climate change. But are they wrong? This cartoon
here shows, how much should the government
commit to stopping climate change?
The big republican guy over here says, “I’m
a big fan of unrestricted and free.” Free
meaning two things here but possibly the idea
that he doesn’t want to pay for a cap-and-trade
program. That’s why this little character
down here calls him a cheapskate.
We can see the big problem here because climatologists
learning from the beautiful success of 1990,
with George Bush, they’ve really grown to
love this enormous top down solution. George
Bush just signs a little piece of paper and
they’ve got their cap-and-trade.
The big government comes in and tells everybody
that if they pollute, they’re going to have
to pay for it. I will cap and you will trade.
Here is big business over here. We don’t
even see the people because they’re not
involved, the climatologists’ solution to
This is what climatologists have been doing
since 1990. They’ve been following that
same road, hoping for the same result. As
we’ve seen with the belief chart spreading,
it’s not looking as immediately obvious
that that’s going to happen anytime soon.
But what’s interesting is that there are
even bigger fundamental problems with how
this is done. If the government is forming
a free market, well, that’s kind of an irony
in itself. The government controlling the
market makes it not free in general.
So the cap-and-trades that we hear about all
the time kind of exists on a trapeze above
the people’s heads. You have the big government,
way at the top, passing down the options to
trade carbon to the big polluters, really
the big companies. There are no people involved
in this trade, at all.
So, they formed a cartel above the heads of
the voters. We begin to see the problem with
that, right. Individuals cannot go online
and start trading their own carbon emissions.
By law, they’re left out entirely.
Okay, so here is the government telling them
stop trading, “We are the free market,”
the government and sort of the irony of it
all is that they’re upset having these petty
people involved in their project.
But what they found is that if you leave the
voters out, if really the only thing you’re
offering to voters is belt tightening, basically
more expenses, they’re going to get disenchanted
with your cap-and-trade. This is a big problem,
because as we know, the strongest social forces
in history are incentivized masses.
If the people can all profit or get involved
in the market economy, we find that it changes
everything. Here’s this kind of humorous
picture of a highway in North Korea and here’s
one in South Korea. If you’re an environmentalist,
this is the one that terrifies you.
But what is really shown in this drawing is
how incentivized people get out and actually
do something and can change the way the world
works. You can sort of think of this as the
current cap-and-trade schemes over here. This
one here is isolating all the people from
No people can actually trade here. You can
sort of see the benefits if you can somehow
allow the people to start trading the carbon
themselves. When we look at the old way of
doing it, we see that we’ve got a lot of
disenfranchised voters and as a result, all
ideas of cap-and-trade seem to be falling
apart. That’s not good.
Okay, now that we’ve set up all these problems,
we have now come to our mission. We need something
that we can launch ASAP. Carbon emissions
are not going away. They’re increasing exponentially.
We love the idea of cap-and-trade but we want
a truly free market. So, no cartels, small
groups make for bad markets. We want something
that is available to everyone on earth.
We don’t want to have to beg and plead with
our cheap and fickle governments. It’s not
only not wrong to want a smaller government,
it’s unrealistic to think that the separation
of beliefs is suddenly going to coalesce and
everyone is going to want a huge governmental
approach to carbon emissions. It just seems
Because of all the troubles with fairness
in the big international accords, we want
to come up with something that is fair. If
we can come up with something that is unarguably
fair even better, because all the arguing
is really part of the tragedy.
Whatever we do clearly must have real regulation.
Some party is abusing the limits or caps that
are in place, there must be some global recourse
in the system to those who are abusing the
caps and limits of carbon emissions.
Finally and most importantly, we want to fight
back against the tragedy of the commons. We
believe the way to do this is through the
strongest social force in history, incentivized
This has everything to do with ownership.
If we can insert ownership into the problem
of carbon emissions, we can change the game.
Fortunately, this is now possible. It’s
not a sure thing but it is now possible.
This is only possible because of the 2009
launching of Bitcoin with its beautiful public
ledgers. So, with no further ado, we propose
a new idea, a new approach. We call it Sno-caps
and it’s the people’s cap-and-trade.
Here’s the little elevator pitch using public
ledgers, Bitcoin’s public ledger. We can
launch a global cap-and-trade today that sidesteps
government and gives equal shares of carbon
emissions to everyone on earth. And it’s
important when you deal with such a big idea
to start looking immediately at the difficulties
of building such a project.
One of the first is say you launch the market
today and you gave everybody on earth equal
shares. Well, the price is going to be next
to nothing or nothing at the beginning and
someday if a big adventurist could see the
benefit in this and go and buy up all the
shares. Here’s a fish who ate all the other
fish in the pond.
Then, they would control the entire market
for the emissions. So you really don’t have
a good market. This whole idea of early market
manipulation’s a problem but you’ve also
created the same problem.
If they buy all the shares, everyone sold
for next to nothing, you end up with all disenfranchised
people. They’re no longer excited about
the idea, at all. This is difficulty number
1 of 4.
Our solution to this is something that you
could have never done before, Bitcoin’s
public ledgers. We’re going to make ownership
lifelong. And all carbon emissions will be
loaned to the big polluters.
Here are the big companies over here and here’s
the individual citizen with lots of carbon
emission rights over here. In our system,
you can never completely sell your rights.
You will always be able to pull your lease
bucket anytime and release it to someone else.
If you’ve entered into a lease contract
with Wal-Mart and you want to switch it to
Whole Foods, you can do that at your beck
and call. You are the landlord of your specific
rights. You have lifelong rights; very big
change to how things are done and only possible
because of Bitcoin’s public ledger.
What you really end up with is a “cap-and-lease”
and not a “cap-and-trade.” Individuals
are now given atmospheric ownership which
is an idea that’s been talked about for
a while but it’s never seemed realistic
to do. Governments didn’t know how to deal
with enormous amounts of leases.
You make the individuals, the citizens, this
earth’s new landlords. This is key because
as we know throughout history, ownership changes
everything. If you can give people individual
ownership in a specific market, then that
market changes entirely.
We’ve seen that with patent ownership, so
with pharmaceuticals or anything else you
can make a patent of. The amount that drives
invention is just phenomenal. People are going
in for themselves and as a result ended up
making products that help the rest of the
We saw it also with Magna Carta which is in
clause 39 suggests that people have rights
to their own property. There’s no question
that the ideas of this created the industrial
revolution fomented all of the growth of England,
made England this enormous power. Just by
simply providing individual ownership.
But why I think it’s actually one of the
more interesting ones since I’ve sold a
lot of music in my life is this idea of music
ownership. If you write a song today, your
rights in the United States will stay with
you for 75 years after your death.
Just like what we’re proposing, you get
a lifelong ownership. With music, you actually
get 75 more years so your family will profit
off of your song, 75 years after you die.
Music is also very similar because it’s
very hard to track.
Can you play music in a bar, you’re playing
music in a club and the bars and clubs actually
pay for that. It’s not something they want
to do. They hate paying for it and the bills
are fairly high. We see a lot of stories about
It isn’t the government that goes in and
makes them pay for the music. It’s actually
two big companies that you might have heard
of. You have BMI and ASCAP. These guys are
the music police. These are third party organizations
who chase down every single one of my songs
on every radio, every club, everywhere on
I get a statement every few months showing
me where that’s played, very similar to
carbon. It could happen everywhere; very similar
to carbon, they’re counting it and tracking
it and billing the individual companies for
Again, this isn’t a government program.
The government will support it simply by the
fact that it agrees that you have those rights,
these 75 years, which are arbitrary. These
are arbitrary things creating real wealth
and creating real individual incentive to
produce music and control those musical rights.
As we try to develop ownership, it’s key
to see that it’s not unique. This is a very
key idea throughout history and has been ignored
recently as climatologists are looking to
cap carbon. It’s something that needs to
Again, as we mentioned, before Bitcoin, it
was absolutely impossible to do. Imagine forming
a government branch to track ownership of
7 billion people on earth and all their ownerships
and leases of carbon and all that bouncing
back whenever they want. That program, itself
will be trillions and trillions of dollars,
But public ledgers which came out with Bitcoin
in 2009 are the ideal solution for providing
something like this. One private key, so this
user has one private key, is all that’s
needed for him to make thousands and thousands
of leases. He can go around and change his
private key and lease out again and again
He or shewill always have ownership of his
private key and he or she will always have
the ability to pull those leases back. Nothing
like this has ever existed before. If we start
thinking about the cost of setting something
like this up, it turns out to be ridiculous.
These are companies already out that provide
this service for free. What, you want 7 billion
lease contracts? We just set it right up.
There’s a very small transaction fee on
each transaction and blamo, you’ve got the
whole system; leases, selling itself, paying
out to the right person all working autonomously.
You can do this today with counterparty; Master
coin is talking about another company called
Etherium. It’s supposed to come out in a
few months, all based on these smart contracts.
Computers are very good at taking one idea,
of maybe one contract, and multiplying it
by billions and handling it with no problem.
Contracts, it turns out are very easy for
computers to negotiate.
We step into difficulty number 2. And this
is a major difficulty, and while the last
one was kind of solvable. This one, we’re
not so sure about, right. Signing up the entire
world isn’t easy.
Right now, we’ve got 7 billion plus people
on earth but the big problem is not all of
them even have IDs. Here’s a recent article
that just came out a couple of days ago about
220 million children on earth who don’t
exist. What it means is they don’t have
Growing up for them is very tough in this
countries just because a lot of high schools
and schools require you to have some sort
of identification to get inside the system.
But the systems are so bureaucratic, corrupt,
et cetera, that it’s very hard for them
to get IDs. Fortunately, there’s a really
big push to change this.
We’re trying to give the world access to
IDs. Now, you don’t need to have an ID if
you don’t want one. If you just don’t
want to exist on earth, you could probably
get away with that. But if you want an ID
and you want to be part of the global citizen
of the global economy, et cetera, this option
should be available to you.
So we see more and more people entering into
the economy, having an online presence via
Facebook. Facebooks now got 2 billion registered
users and growing. But we’ve also seen companies
like Circle now start to look at this as a
possibility, as well.
They haven’t even launched yet but they’re
talking about trying to incorporate the world
citizens into a financial system. And this
company has a lot of financial backing and
hopefully they’re going to take on, leading
the charging to this abyss.
What’s clear is that you can start to build
the system with the people who’ve got IDs.
You can get people registered as much as possible.
Over time, a system like a cap and lease can
grow as people get involved in the system.
As soon as they get involved, well, they can
lease at the same rate that everybody else
on earth is leasing at. It gives them an incentive
of financial incentive to actually get their
identifications. This might be a nice thing
Now, were here with difficulty number 3. This
is a problem right? If network effects takes
time, any big network, Facebook, Google, Bitcoin
itself takes a number of years before it develops
to a point where it’s really changing the
way things are working on earth.
A system like Sno-caps would likely take a
minimum of 5 years before it really starts
dropping carbon in any significant way, at
all. That would be the hope.
The trouble is in those 5 years, we’re losing,
so we’re actually polluting like crazy.
We’re putting up carbon dioxide in the atmosphere
which stays up there for a thousand years.
We’re going to be paying the price for that
We’re left with the situation of sort of
the rabbit, which is Congress. They could
come down tomorrow and slap on the cap-and-trade.
They could provide amazing regulation tomorrow
or our system which is sort of the tortuous
solution which would take a while, 5 years
The only good news about this is it doesn’t
seem immediately obvious that Congress is
going to be doing anything in the next 5 years.
We’ve gotten close to producing some legislation
but Congress has known about global climate
change. They’ve know about carbon emissions
for 30 to 50 years. The inaction there just
We’re not close to having any major policy
today. Remember, there are also issues with
this enormous top down approaches anyways,
they leave the people out. These systems that
we’re kind of hoping for are imperfect at
best, as they are.
We might be better off with letting a system
grow and build service at grassroots. And
then, letting government come in at the end.
It’s always nice to have some help from
all parties involved, government included.
When government comes in at the end and not
at the beginning, it often is much stronger,
the legislation is better, the regulation
is better and the support is more effective.
It might behoove us to actually let the network
build which incentivizes voters, which incentivizes
congress and letting government come in much
stronger at the very end.
We’ve looked at three of the four major
problems. This last one is the real problem.
This is the real monster problem right here,
the biggest of them all. It has to do with
Public ledgers have no police. Public ledgers
just exist on computers. They don’t have
any regulation. They don’t have any strong
arm to go about and make sure that what you
claim to be trading, selling, or whatever
on your public ledger is actually happening.
As it says here, public ledgers have no police.
Well, congress has the ability to pull the
strings of police to actually move manpower
to get things done. This is why climatologists
love Congress. The Congress can just be this
big bully and beat these people up and say
this is what happens when you don’t pay
for your carbon emissions.
Without regulation, well really, it’s game
over. You don’t have the cap-and-trade.
You have just a trade. You have no real cap.
You haven’t really stopped anything.
We’re really in search of the new idea or
a new force to change the ways things work.
This is the old problem; we really need a
new ‘POW’, a real whammy. It will be nice
if the thing we’re looking at is already
been shown to work on some level.
And indeed the thing that we’re going to
talk about has worked already on a number
of massive online sites and it works quite
well. What we’re talking about is REGULATION
BY REPUTATOIN. If we go back to the previous
slide, all of these sites have some form of
policing done by reputation itself.
eBay is a great example. If you’re selling
a product on eBay or buying a product, you
look very carefully at how many positive reviews
and positive feedback they have. You’re
unlikely to make a purchase or sale unless
you’re looking on the order of 90% or above
because anything less than that, you start
to see there’s some risk.
This is true with the selling on Amazon and
even reviews on Amazon. This is true with
YouTube, where people will only watch videos
if they’ve got enough thumbs up or enough
view counts, et cetera. The same is true with
Twitter, Facebook and LinkedIn.
We’ve really seen a modern revolution of
regulation by reputation, such as the business
world has really taken note. Here’s an article
“6 Steps to Managing Your Online Reputation”
which can be really damaging for a company.
If your restaurant is on Yelp and you’ve
got lots of bad reviews, you’re going to
find your customer base is dropping.
Here’s a little joke down here. “Where
do you hide the dead body? Answer: on the
third page of Google results.” Basically
referring now the fact that most people will
find their search in the first page or two
and rarely do they even go to the third. They
usually figure out what they’re looking
for in the first couple of pages.
If your bad news is on the third page, well
that’s probably okay but if they typed in
your company’s name and it’s there on
the first page, you’re in trouble. So, a
Google search can be your best friend or your
And we’ve seen this really coming to play
with more and more new companies where they’re
really relying on this reputation to insert
an online presence into things that had no
online presence before.
So here’s negotiating hotel rooms in individual
people’s houses. Something that seems so
sketchy 10 years ago has now become so big
that Airbnb is valued at billions and billions
The same is true with Uber. You can walk out
in the airport and some person in a regular
car will pick you up. All these things we
used to be really afraid of are regulated
by online reputation schemes.
If we think about something like carbon emissions,
if a company or a product is being made with
sort of sloppy carbon emission standards,
we could start to see responses from other
So whole Foods will not buy your product if
it’s got certain ingredients. In fact 54%
of the food sold at Wal-Mart, you will never
see at Whole Foods because of their rules
and regulations based on information they
have on that product.
These are very powerful market driving features
as we’ve seen Whole Foods has really grown
to a powerful market force in the last dozen
This is a really important thing. This ability
to regulate by reputation is a major sea change
with how humans are interacting on earth and
how products are being delivered and sold.
There’s a chance that we might be able to
do some regulation of carbon emissions just
by dealing with this very modern concept of
As we’ve already looked at the 4 major difficulties
with coming up with such a scheme, let’s
look at some of the advantages that would
really help drive sort of the market adoption
or the user adoption of such a cap-and-lease,
or cap-and-trade scheme.
These are the big advantages of Sno-caps.
We’re just going to run through this list
today because in our next video, we’re going
to detail each of these individual advantages,
highlighting exactly how they could work to
build the massive global adoption that is
required for building a carbon emission’s
Remember, Sno-caps incentivizes the masses.
Each person on earth could end up profiting
by leasing their own rights, their atmospheric
rights of carbon emissions. You’re actually
giving every individual on earth the chance
to profit. That’s a fairly big incentive.
We’ve already spoken how we’re going to
at least start by using a modern approach
to regulation, this idea of reputation. We’ve
also mentioned how inexpensive this could
be. Remember if we’re running this contractual
system on Bitcoin’s public ledger, the expense
of running this system is just the initial
It’s important to realize that Bitcoin was
also launched for free – so this possible
rewriting of all international finance is
just coming along by itself. But it’s incentivizing
many, many people.
It produces incentives that are also very
inexpensive to launch, likely launched by
one person who’d just press go on his computer.
We’re hoping to do a similar thing with
As a result, we can launch today or as soon
as the software gets done. The key here is
there’s no need to wait for Congress. There’s
no need to create new science or make more
insulting cartoons for the skeptics to change
because they’re not going to change. They’re
The only way they’re going to change is
if they start to see something working or
if they’re incentivized to join the system.
So, “no waiting for Congress” really means
“no waiting for all the skeptics, the Koch’s
brothers, et cetera.” We can do it for very
cheap and we can launch without having to
convince everybody to jump on at the beginning.
The next one, inside of the system, we have
two powerful feedback loops which drive adoption,
which we’ll talk about in the next video
and regulation. We’ll get new forms of regulation
not just the regulation form here. We’ll
get new forms of adoption that are not just
based on the initial incentives to the masses.
These things can be accelerated by feedback
loops which drive capitalism and all the exponentially
UP functions that we’ve been talking about.
Wouldn’t it be great if we could use an
exponential function to drive carbon emissions
down? That’s what we’re looking at here.
Another thing that’s very, very important
if you’re going to launch a cap-and-trade
scheme, is that it be transparent. A lot of
countries and a lot of individuals in every
country are very skeptical. They’re going
to want to tear down your system but if you
could show that your system is fully transparent,
you’re going to eliminate a lot of that
And the beautiful thing of a Bitcoin public
ledger that it’s never existed before is
100% transparency. You’re going to look
in and be able to see every transaction. You’ll
be able float a penny inside the system and
you’d be able to track it.
That’s transparent, fully transparent – really,
really helps with global adoption because
of all the cynics and all the critics and
all the naysayers. They’re going to be able
to analyse the data. They’re going to be
able to make moves themselves and see those
moves happening inside the system, 100% transparent.
And we’ve touched the planet already but
this is a very, very important thing is that
our system is fully voluntary. Congress isn’t
coming down and forcing you to do it. You
are choosing to sign in. Clearly, there are
some big advantages of voluntary over forced.
If people do come in because of all the incentives
that they get, they’re going to be much
more positive than if the government’s coming
around with regulators telling them exactly
what they need to be doing and how much they
need to be paying, with no incentives but
belt tightening for them.
The other thing that’s really a key and
we’ve barely touched on, is that one of
the big troubles with Kyoto and Copenhagen
is the idea of fairness. Should this country
do more? Should this country do less? This
country has been developing and polluting
for a long time so maybe we should let the
others catch up; big, big issues of fairness.
Part of this is because they’re drawing
political lines and geographic lines. Our
system tackles this from the opposite angle.
We offer equal access to every citizen on
earth. That’s a form of fairness that’s
pretty hard to argue.
Every individual in the system that can sign
on clearly has some issues with internet access
and ID access and all that stuff right now,
will have equal abilities in the system to
benefit. So very fair. Everyone gets a share
or everyone gets 10 shares so it’s just
an equal amount of shares.
Another really important advantage is by actually
putting a cap-and-trade out there that anyone
can use, you are providing an option where
in most places there is no option.
If you’re living in most places in the United
States, there is no cap-and-trade in your
area. There is nothing even close to being
If you’re living in most countries on earth,
there is no cap-and-trade. If you’re government,
now, all of a sudden you’ll have not only
the option of choosing this one but you’ll
be able to look at it and maybe model it and
develop your own. Or you’ll have the ability
to say “well, I didn’t design it”, so
you’d have some plausible denial, “but
we’re going to use it” so that you aren’t
responsible for all the fairness issues and
For some government people, it’s better
to have systems they can just sign on to that
are already built, that aren’t perfect.
Then start arguing all the time about what
fairness is and these things get really, really
In these conventions, where all the countries
and all these political leaders, the documents
just grow, grow, grow, grow, grow and the
systems become so convoluted and complex that
people just don’t know what they’re talking
Because we’re designing the system based
on one user, one share, it’s as simple as
it gets. It’s very easy to understand but
it provides an option for anybody out there
who’s looking to get involved in a cap-and-trade.
Sign on, start trading and have some fun.
So that’s all we’re going to cover in
this first part. The next part we’re going
to actually go through each one of these individually
and really look at how they could spur adoption
and really start lowering carbon emissions
This would be great. Without Bitcoin, it would
be absolutely impossible. Public ledgers have
changed the game and we’re just hoping to
apply it to this really intractable problem
of frat house bathrooms, the tragedy of the
The beauty is carbon is countable so we can
see how we’re doing. We can see how individual
companies are doing. We can see how individuals
are doing. As a result, it is an ideal thing
to actually trade and if you can cap it, people
will definitely trade.
Before we go, we normally say, “Please like,
comment, subscribe, et cetera on YouTube.”
That would be great. Do all that.
But there’s something more important you
can do right now. We were kind of late in
the game into this great MIT Climate CoLab
challenge and we’re going to post the link
But if you really like to serve idea; if you
really see the black chain, being able to
tackle carbon emissions or at least give it
a shot because it’s so inexpensive, we might
as well try. Please sign on here and comment
If you do like, please go over here because
right now, even though we came in late, we’re
number 2 of about 40 submissions. We’d love
to get to the point where we really get recognized.
There’s not a lot of prize money here but
there is some recognition and some help with
developing a program like this.
And though something like this is fairly easy
to code, it will still take a little bit of
work. It needs some attention at the beginning
to really get the ball rolling.
It would be really great to get that attention.
Again, like, comment, subscribe but we’re
going to post the link to the Climate CoLab
which will look something like this. Please
click over there and do what you can over
Again, if your comments aren’t positive,
that’s fine as well, we’d love to hear
them here. But if you do enjoy it we’d love
to hear it here. And there is no thumb down.
I think there should be some sort of thumb
down here. It’s a very positive site so
you really don’t have the option if you
do click, you’ll click over here.
As we know, Bitcoin comes so far from left
field that it takes a lot of people a long
time to understand. The same is true with
an idea like this. This is so far from left
field if you know nothing about public ledgers
and their ability to rewrite how we do trading,
ownership and contracts.
So even the idea will take a little while
to develop, take a little while to settle
in but with little luck, we might even be
able to make initial launch later this year
or early next year. Then, let Metcalfe’s
law sort of climb in.
We’ll start maybe first year with one trade
and move up and if it does move up, well,
that would be great because then we could
drop CO2 emissions down. We can make the planet
a little but safer for my son who is now two
and a half years old.
Okay, so, remember, please like, comment subscribe
but even more importantly, hop on to this
page. You’re going to have to log on and
give it some support over here and make some
comments over here. The People’s cap-and-trade
MIT Climate CoLab contest. Thanks again and
we’ll catch you at our next video.